Carl Icahn Says 'Enough!' to Overpaid, Underperforming CEOs

Billionaire investor Carl Icahn places the blame for much of the recent corporate carnage squarely on the shoulders of the companies' boards of directors, which are supposed to keep an eye on the bottom line for the shareholders.

"The trouble with the country is that we don't have accountability. The boards in this country are not doing the job, and that's why you have the trouble on Wall Street," Icahn told ABC News' John Stossel.

Icahn, 74, has been called a corporate raider, renegade capitalist and the Superman of shareholders because he has battled entrenched corporate boards to bring greater efficiency to companies and value to shareholders.

Over the years, Icahn has taken controlling positions in mega-companies like RJR Nabisco, Texaco, Western Union, Viacom and Time Warner.

Icahn recently sat down with Stossel to discuss a system that richly rewards CEOs while their companies fail.

Watch John Stossel's interview with Carl Icahn Friday on "What Are You Worth?" -- a special edition of "20/20" at 10 p.m. ET

Icahn faults the boards more than the CEOs of troubled financial companies because the boards ignored the red flags raised over risky mortgage-backed securities.

"Everybody got their huge bonuses, but who paid the price?" he said. "Not the CEOs, not the board members. The shareholders of these companies paid the price. And that's unfair and it's wrong."

But Icahn also says that awarding huge salaries to underperforming CEOs is "absurd ... it's a complete travesty."

Icahn -- who stresses that there are many good boards and CEOs -- maintains boards don't have to pay a fortune to get a talented chief.

"I assume the people on the board aren't stupid. Why are they giving them all this money?" Stossel asked.

Icahn has called CEOs the survivors of the corporate world, but says it's the "survival of the unfittest": "[The CEO] would never have anyone underneath him as his assistant that's brighter than he is because that might constitute a threat. So therefore, with many exceptions, we have CEO's becoming dumber and dumber and dumber."

Icahn: Beware Good Golfers

The person who moves up the ladder to CEO, Icahn told Stossel, is more of a politician than a manager.

"He doesn't make waves, because if you make waves they throw you out."

When asked if he objected to successful CEOs being paid high salaries, Icahn said "absolutely not."

"Let him make his money if the shareholders are making the money," Icahn said. "But don't pay him these huge bonuses, these huge severances."

Executives should be fairly compensated, Icahn said. "It's insane to pay somebody 700 times what the average worker gets."

"By and large, the guys on those boards are businessmen, and they should know how to hold these guys accountable, and know what numbers to look at. You don't go in and say, 'You ought to do this, this and this to run the company.' You say, 'Hey, you're not doing as well as your peers, how come?'"

Icahn added that "Hey, by the way, you don't have to be playing golf every day.'"

"Most of them aren't playing golf all the time," Stossel countered.

"You'd be amazed," Icahn replied. "I have a rule that if a guy has a five handicap or lower, I don't want him."